Bush and Congress Agree to $1.35 TrillionTax Cut

by AccountingWeb on May 2 2001printer friendly

"The largest tax reduction in 20 years," is the way analysts are describing the tax cut plan agreed to by Congress and the White House late Tuesday. Under the new plan, taxes will be cut by $1.35 trillion and this cut will be phased in over the next eleven years.

Conservative Republicans who hoped for a larger cut ($1.6 trillion was the original goal) are complaining only mildly, and many hold out hope for a few more small tax cuts in future years.

Although the particulars of the tax plan have not been ironed out, it appears that the big winners will be families with children.

Estimated savings for a married couple earning 60,000 with two children are $380 in the first year of the plan and $1,900 per year when the full phase-in period of eleven years has passed. The same couple with no children would see a savings of $180 in the first year and $900 per year when the plan is fully phased in.